Millionaire - Janet Gleeson [2]
The American investment guru Warren Buffett once said, “If history books were the key to riches the Forbes 400 would consist of librarians.” Nevertheless, three centuries after John Law delighted, then devastated investors in his Mississippi stock, an age of comparably varied and ambitious financial innovation unfolds—witness the introduction of the euro, the opportunity to trade shares on the Internet, and a panoply of monetary instruments, from foreign-currency mortgages to inventive use of derivatives in equity, bond, and currency markets. In such a world Law’s story still holds uncanny relevance.
During the period covered in this book English and French currency was based on a similar structure: 240 pennies or deniers = 20 shillings or sous = 1 pound or livre tournois. Coins in common use in France included the gold louis d’or and the silver écu, which were measured and varied widely against the value of the livre. Another common coin was the pistole, a Spanish silver coin worth approximately 10 livres. Exchange rates also varied enormously: a livre was worth between a shilling and 1s. 6d. According to the Bank of England a pound in 1720 is equivalent to about £73 (US$117) today. Therefore a sum quoted in livres can be converted to its approximate equivalent in dollars today by halving it, then multiplying by twelve.
1
A MAN APART
He came to Paris, where he cut such a fine figure that he held the bank at Faro. He usually played at the house of a famous actress, where they played for high stakes, although he was in as great demand with Princes and Lords of the first order, as in the most celebrated academies, where his noble manners and even temper, distinguished him from other players.
Barthélemy Marmont du Hautchamp,
Histoire du système de finances (1739)
IT IS AN EVENING IN NOVEMBER 1708 IN THE PARISIAN salon of Marie-Anne de Chateauneuf—“La Duclos”—a celebrated actress of Paris’s Comédie Française, and as usual she is entertaining Parisian society. Despite the lustrous presence of sundry ducs, marquis, and comtes, talk is uncharacteristically desultory. France is in the throes of the world’s first global war, the War of Spanish Succession, which has raged already for seven years and will endure for another six. This country, the most powerful and populous in Europe, has been ruined by the perpetual conflict. But this cocooned Parisian circle is scarcely conscious of it: the talk is not of the devastating defeats France has suffered at the battles of udenaarde, Turin, Ramillies, and Blenheim. It focuses instead on the move of the elderly Louis XIV, the Sun King, and his court from Versailles to Marly, and the love affairs of the fascinating but apricious Duc d’Orléans.
Those who find these topics less than engaging are drawn instead to the cluster of players engrossed in a card game, faro. Most are habitués of the tables—at this level of society everyone knows everyone else—but among them one man stands apart. He is fashionably clad as one would expect in a wideskirted velvet coat, unbuttoned to reveal a damask waistcoat and cravat of Brussels lace, while a periwig of black curls cascades over his shoulders. But at over six feet tall—a remarkable stature in these diminutive days—he is a man of grand and imposing looks that according to one acquaintance “places him among the best made of men.” Amid the twitchy players, he is also remarked for his gentle and insinuating manners, a serenity of temperament that amply reflects his outward appearance.
During a lull in play La Duclos proudly presents the stranger as John Law, a Scottish gentleman visiting Paris. Her guests soon realize, however, that although Law is as charming and witty as he is physically attractive, he’s reticent when questioned on his circumstances. They also discover, as the evening progresses, that he is a master gambler.
According to the rules of the game, the players must defeat a single opponent, the tallière, or banker, to win. This evening Law has been permitted to pit his wits against the rest